What the Great Resignation Means for Employee Benefits
Some 4.3 million Americans voluntarily left their jobs last December, according to the U.S. Bureau of Labor Statistics. That’s down slightly from the all-time high in November, but clearly, employees continue to quit their jobs at a breathtaking pace.
The reasons behind the Great Resignation are many and often debated. Clearly, Covid-19 has a lot to do with it. Scores of employees have quit their jobs due to health concerns and childcare issues. But there are also plenty of people who resign but don’t leave the workforce. These workers often are searching for better jobs, which can be defined in any number of ways, including more rewarding, more flexible, or more stable.
A bigger paycheck is certainly a big motivator too. But a September 2021 survey of 1,000 full-time employees (across industries) by Betterment reveals that employee benefits — especially financial benefits — are playing an increasing role in the Great Resignation.
Overall, about eight in 10 employees say it’s important that their employer offer financial wellness benefits, and 71% say that these benefits are more important now than they were pre-pandemic. Importantly, 74% of respondents said they would likely leave their job for an employer that offered better financial benefits.
Here are other key takeaways from the survey that may be especially interesting to benefit pros.
The Financial Benefits That Could Lure Employees Away
When asked what benefits a prospective employer could offer that would entice them to leave their jobs, 65% of respondents said a high-quality 401(k) program and 56% cited a 401(k) matching funds program. That’s not surprising considering 68% of respondents said building their retirement savings was more important to them now than it was before the pandemic, and 49% said they no longer think their 401(k) will be enough to sustain their retirement.
Other benefits ranked high as well. About a third of surveyed employees said that a flexible spending (FSA) or health savings (HSA) account could lure them to a new position, while 29% said they would be most enticed by a wellness stipend, and 27% cited an employer-sponsored emergency savings program. Student debt weighs heavily on some workers’ minds, with 24% saying they would consider switching jobs if the new employer offered student loan assistance or a repayment program.
Employee Attitudes About Financial Benefits Are Changing
Amid the financial challenges of the pandemic, many employees are taking a fresh look at their financial benefits to see if they fit with their changing needs and goals.
For instance, 71% of respondents say financial wellness benefits are even more important now than they were pre-pandemic, and 68% report that they would choose more financial wellness benefits over an extra week of vacation. In addition, a full 75% said that even if/when they return to the office full-time, they will still prioritize financial well-being benefits above in-office perks like snacks and ping-pong tables.
Employees surveyed clearly appreciate their employer’s benefit programs, with 83% saying that financial wellness benefits are a signal that their employers value them and their work. That said, 78% of respondents want their employer to more clearly communicate the financial benefits that are available, and 63% expect more financial support from their employers than they did before the pandemic.
Why Employees Don’t Use Their Benefits
Despite the desire for more financial benefits, the survey found that nearly a quarter of employees surveyed take advantage of only a small amount or none of their available benefits. That makes sense to a certain point because not all benefits are appropriate for all employees. But when asked what their primary reasons for not taking advantage of benefits were, only a third said it was because they didn’t need all of them.
Indeed, an alarming 36% of employees said they weren’t sure what benefits their employers offered. Nearly 20% said they hadn’t gotten around to signing up yet, and 11% said they didn’t know how to sign up.
Employee Attitudes Toward Student Debt Benefits
More than a third (36%) of the survey respondents have student loan debt and, of that group, a full 85% said they would be enticed to leave their job for an employer that offered better financial benefits. More than 40% specifically cited a student loan repayment program.
These high numbers correlate with results that show student loan borrowers have been hard hit by the pandemic. Almost 70% of respondents with student loans had to use their emergency fund since the start of the pandemic compared to 31% for employees without student debt. Four out of ten employees with student loans took on a second job or part-time work, compared to just 15% of non-borrowers. That’s the case even with the federal student loan pause that allows borrowers to defer Federal student loan payments until May 1, 2022.
Interestingly, the majority of employees with or without student loans (57%) believe employers should play a role in helping employees pay off student debt.
What Employers Can Do
As several of the survey results highlight, effectively communicating the financial wellness benefits you provide is a top priority. This means broad communication efforts to the entire workforce and targeted communications to demographic groups most likely to need certain benefits or most likely to ignore or misunderstand traditional communication efforts.
You may also want to add or enhance benefits workers most need and want in light of the pandemic. You can use both internal data (from employee surveys and feedback) as well as external data to determine what benefits are most urgent. For employees polled by Betterment last fall, high-value perks included: an excellent 401(k) or another retirement plan, a flex spending or health spending account, a wellness stipend, an employer-sponsored emergency savings program, student loan assistance, and childcare support.
Finally, you may want to consider reallocating existing benefit dollars that align more with the new normal. Money used for in-office perks, for instance, might be better allocated to “>childcare support for parents working remotely.
As you navigate the Great Resignation, know that SoFi at Work offers a wide range of financial wellness platforms and education tools. We can enhance your efforts to effectively communicate your existing programs and help you design new benefits that further support your workforce and increase productivity and loyalty.
Photo credit: iStock/SDI Productions
SoFi at Work is offered by Social Finance Inc. SoFi loans are offered by SoFi Lending Corp. or an Affiliate (dba SoFi), licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 www.nmlsconsumeraccess.org . The Student Debt Navigator tool and 529 Savings and Selection tool are provided by SoFi Wealth, LLC, an SEC-Registered Investment Adviser. For additional product-specific legal and licensing information, see https://sofi.com/legal.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.